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DigitasLBi in the News

Tnooz • August 16, 2017

Turning the 80/20 rule on its head in hotel CRM

The 80/20 rule often comes in handy for prioritising scarce resources.

Look in your CRM database and you’ll likely find that roughly 80% of your revenue is driven by roughly 20% of your customers.  Therefore, it follows that you should focus your limited time and budget on that critical minority of customers.

It’s the smart thing to do. Except when it’s not.

This is a viewpoint by Daniel Hughes, head of data science international, DigitasLBi.

No one would fault you for doing the obvious thing.  In fact, most leaders regardless of industry make the same choices and direct investment toward the small minority of customers that are most important to the business.

The trouble is this is not necessarily a recipe for growth.  It may instead be a strategy for minimizing risk by protecting existing revenue at the expense of growth opportunities.

Growth sometimes necessitates risk.  It means doing things differently.

If your desire is to innovate.  If you want to be a disruptive force in your industry.  Try inverting the 80/20 rule by figuring out what to do with the 80% of your customers who account for only 20% of sales.

Here’s an example from the hotel industry.  We delved into the CRM databases of multiple hotel brands to understand how many guests had booked only once in the past five years.  In every case it was a big number.  We looked deeper.

The average value of those stays was higher.  They were more likely to have booked direct than through a third party.  And they were less likely to have booked under a discounted corporate rate.

Many even enrolled in the loyalty program.  They behaved like model customers.  The only problem is they booked only once and never returned.

With these additional facts what strategy would you pursue?

It’s not a trick question.

There’s a strong argument for either course of action.  One could double down on the most profitable segment to find new ways to delight those customers and ensure their continued loyalty.

Or one could take a contrarian approach to figure out how to reengage those previous guests with whom your brand had only a one-night stand.

What was different about the journey of these customers? What changes to the experience could you make to win them back? What would your business look like if it pivoted the model entirely around the needs of the 80%?

We did some back-of the-envelope calculations to estimate the financial impact of convincing even a small percentage of these guests to return one more time.

The resulting impact for a single year was greater than the sum total of growth over the preceding five years.  This is not to suggest it is easy to do.  But certainly, it is worth reconsidering the conventional thinking of the 80/20 rule.

This is a viewpoint by Daniel Hughes, head of data science international, DigitasLBi.

Mediaworks • March 27, 2017

Our very own Charlie Newbery , Head of Media at APAC will be one of the mentors at MediaWorks in Hanoi this year.

The Drum • November 8, 2016

How a marketer's need for certainty is redefining creativity  

Digitas is appointed the lead global agency for Shangri-la  andtackles a marketer's need for certainty is redefining creativity

Campaign Asia • November 8, 2016

VR: Not there yet, but you can’t ignore it

CTO of DigitasLBi, Scott Ross comments on VR conversation andthe role it plays in the marketing mix.

Marketing Interactive • November 6, 2016

AirAsia gets more data focused with new JV

David Atkins, lead strategist DigitasLBi comments on air asia JV.

Marketing Interactive • November 1, 2016

Samsung Pay launches in Singapore

Oliver Spalding, group head of strategy, SE Asia & Greater China of DigitasLBi comments on the release of Samsung Pay in Singapore

 

Marketing Interactive • November 1, 2016

Did Nintendo lose out by not launching Pokemon Go in Singapore?

Justin Peyton, chief strategy officer APAC of DigitasLBi comments on why Pokemon Go is such a global phenomenal

Marketing Interative • October 31, 2016

Facebook’s blocking of ad blockers: A costly affair?

Oliver Spalding, group head of strategy, Southeast Asia and Greater China strategy partner said that while Facebook is re-iterating that their focus is on quality and relevancy, the rise in ad-blocking strongly indicates that they are failing at being creative.

B&T • August 10, 2016

Global Retail Study

Aussies protective of data, seek the opinion of friends & use wearables when shopping

The Drum • April 25, 2016

APAC Creative Work of the Week: Shangri-La Hotels #NextJen

DigitasLBi Singapore wins APAC work of the week for their #NextJen campaign